1990 (2) TMI 177 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods.
2. Valuation of imported goods.
3. Confiscation and penalties under Section 111(m) of the Customs Act, 1962.
4. Request for re-testing of samples.

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:
The primary issue was whether the imported consignments should be classified as "Brass Dross/Ash" or "Brass Waste/Scrap." The appellants claimed that the goods were Brass Ash/Dross, which falls under Heading 26.02/04 of the Customs Tariff, while the Revenue classified them under Chapter 74.01/02 as Brass Waste/Scrap. The Customs House Laboratory initially found high copper content, leading to a re-test by CRCL, New Delhi, which confirmed the goods were almost entirely metallic with some scrap pieces. The Chief Chemist's report concluded that the samples did not possess the characteristics of dross but could be considered Brass Waste/Scrap. The Tribunal upheld the Revenue's classification under Chapter 74.01/02, noting the metal content was more than 91%, and rejected the appellant's argument for separate assessment of metallic pieces and powder material.

2. Valuation of Imported Goods:
The appellants did not initially challenge the valuation aspect in their grounds of appeal. The Revenue authorities found a discrepancy in the invoiced value of the consignments, suspecting mis-declaration with an intention to evade customs duty. The Tribunal noted that the appellant raised the valuation issue for the first time during the arguments and did not seek permission to amend the grounds of appeal. Citing the Supreme Court's view in Hukumchand Mills Ltd. v. Commissioner of Income Tax, the Tribunal refused to entertain the new ground, as it was not within the subject-matter of the original appeal.

3. Confiscation and Penalties under Section 111(m) of the Customs Act, 1962:
The Collector of Customs ordered the confiscation of the goods under Section 111(m) due to mis-declaration of the value and nature of the goods, but allowed redemption on payment of fines. The fines imposed were Rs. 1,00,000/- for Bill of Entry No. 1957/176 and Rs. 2,80,000/- for Bill of Entry No. 2065/111, with additional penalties of Rs. 10,000/- and Rs. 25,000/- respectively. The Tribunal, considering the prolonged detention of the goods, reduced the redemption fines to Rs. 50,000/- and Rs. 1,40,000/- respectively, but upheld the personal penalties as not excessive.

4. Request for Re-testing of Samples:
The appellants argued that the samples were not properly drawn and requested fresh sampling and testing. The Tribunal noted that the second examination was conducted on the appellant's request, and there was no justification for a third re-test. The Tribunal rejected the request for fresh sampling and the formation of a committee for inspection, citing the adequacy of the existing tests and reports.

Conclusion:
The Tribunal upheld the Revenue's classification of the goods as Brass Waste/Scrap under Chapter 74.01/02, rejected the appellant's late challenge to the valuation, and confirmed the confiscation and penalties under Section 111(m) of the Customs Act, 1962. The redemption fines were reduced due to the prolonged detention of the goods, but the personal penalties were deemed appropriate. The request for re-testing was denied, affirming the validity of the Chief Chemist's report.